What is Homestead

What is a Homestead?

Think of the word homestead and pioneering families heading west to settle the land likely come to mind. But in real estate, the word has a different meaning.

A homestead is your primary residence, which in many states is given an exemption from a portion of property taxes, or is even shielded from some liability. In the state of Florida, your homestead is also granted special treatment under probate law.

For your home to be designated as a homestead, it must be your primary residence. That means if you live in Florida only during the winter months, it can not be a homestead property.

A homestead designation doesn’t happen automatically. To qualify in any given year, you have to own the home as of January 1st of that year. Then you have to apply within the first few months to the county where you live, offering proof that you own the home and are a Florida resident. In Broward County, you can apply here. In Palm Beach county, apply here.

Here’s what having your home designated as a homestead in Florida will do for you:

  • Protects you from creditors. If someone sues you for a money judgment and you lose, you can be forced to sell your assets to pay the judgement. If your home has the designation of homestead, you cannot be forced to sell it. You also can’t be required to sell a homestead property to pay off other outstanding debts.
  • Gives you a break from a portion of your real estate taxes. A complicated formula is used to exempt a portion of your home’s value from property taxes, but most homeowners save hundreds or thousands of dollars each year.
  • Allows surviving spouse and minor children to have special treatment. When the person who owns a homestead dies in the state of Florida, the surviving spouse has legal rights to remain in the home, regardless of  what’s in the person’s will.
  • Shields the home from creditors during probate. After the homestead homeowner dies, creditors owed money by the estate cannot put a lien on the home.

Once you have a homestead designation, the county will continue to apply it each year. In the event you no longer quality for a homestead–say you buy another primary residence and use your former home as a rental unit–the law requires you to notify the property appraiser’s office by March 1st of that year to remove the exemption. If you don’t do that, you can be subjected to hefty penalties.

If you move from one Florida residence to another, it is crucial that you apply for a homestead exemption, if not immediately, at least within two years of buying the new home. That’s because Florida’s Portability Law allows owners to transfer savings from the state’s property-tax-lowering “Save Our Homes” benefit from one homestead property to another within a two-year-period. To qualify for that benefit, you have to submit a portability application along with your homestead application.

Having the Law Offices of Gary M. Landau by your side during each step in a real estate or probate matter helps insure that the process goes as smoothly as possible. The Law Office Of Gary Landau is rated 10 out of 10 by the legal website AVVO. For more information, call 954-979-6566 or email for a free consultation.

Homestead Exemptions for 2017–What You Must Do Now

homestead excemption 2017With the end of the year rolling around, now is the time to set yourself up for a Florida homestead exemption for the next tax year.  Starting next year, this exemption gives permanent residents a deduction of  $50,000 from your home’s assessed value, as well as qualifying you for additional benefits.

If you have lived in your home for more than a year and have previously had a homestead exemption, you don’t need to do anything.

If you’ve moved in the last year, however, or are about to close on a home, you must take steps to ensure you get this deduction for the coming tax year.

First, you must close on your home no later than December 31st. Then, you must take steps to demonstrate that this is your permanent home, such as changing your address on your driver’s license.

Before March 1st, you must officially file for this exemption with the Tax Appraiser’s Office. (Find your local office at http://floridarevenue.com/dor/property/appraisers.html).

Properties granted a homestead exemption also automatically qualify for the “Save Our Homes” benefit, which limits the increase in assessed value in future years to either 3% or the Consumer Price Index change, whichever is lower, in the second consecutive year the exemption is received (unless you add an addition or do other major construction). If you had homestead and Save Our Homes with a previous home, you must buy a new one within two years if you want to transfer your old benefits to the new home.

Homeowners who want to add an adult child or other relative to their deed must be careful to do so in a way that doesn’t jeopardize their homestead. If you don’t do it right and lose your homestead, your assessed value for tax purposes will jump to the fair market value. Having an experienced real estate attorney make this change will ensure this doesn’t happen.

For a FREE consultation to discuss these and other real estate issues, contact the Law Office of Gary M. Landau by email or call 954-979-6566. Attorney Gary Landau personally returns all calls to him.